**Bitcoin NVT Indicator Signals Price Realignment: Is the Market Underpriced?**

On-chain metrics are becoming increasingly important for understanding Bitcoin's true value proposition. CryptoQuant analyst MorenoDV_ recently highlighted the NVT golden cross indicator (smoothed with a 100-day moving average) as a key lens for evaluating whether Bitcoin's market capitalization matches its actual network activity. The NVT metric functions similarly to a price-to-earnings ratio for equities, substituting transaction volume for earnings to answer a critical question: does the network's valuation reflect genuine economic participation?

**What Does the Current NVT Data Tell Us?**

The latest readings paint an interesting picture of Bitcoin's valuation status. Short-term NVT levels are trading meaningfully below their long-term trend, suggesting the network is operating at a discount to its on-chain transaction velocity. The indicator's recent trajectory is particularly noteworthy—it plunged to a historical low of -0.58 during periods of intense market weakness and risk aversion, but has since recovered to approximately -0.32. This recovery, while still conservative, indicates gradual price recalibration toward transaction-driven fundamentals.

**Historical Context: When Undervaluation Precedes Recovery**

Deep negative divergences between short-term and long-term NVT typically emerge during deleveraging cycles and risk-off environments. These periods, though uncomfortable for market participants, historically coincide with accumulation phases and structural price discovery. The current market appears to be transitioning from severe undervaluation toward equilibrium, with selective capital reinflowing into digital assets.

**What's Next?**

The gradual rebound from -0.58 to -0.32, while still indicating conservative valuations, may signal that Bitcoin is entering a healthier price discovery phase. As the NVT indicator continues normalizing, it could reflect both improved market sentiment and more sustainable valuation mechanics. For those tracking on-chain signals, this metric remains worth monitoring as a potential indicator of structural opportunities ahead in the crypto market.